Tag Archives: Reliability

Are you performing preventive maintenance on a regular basis? If you’re not, you may want to consider adding it to your schedule. Why? In a word, it’s about efficiency. In a few words (as its name suggests), it prevents problems before they start. Preventive maintenance is becoming the manufacturing industry standard. Roughly 80% of asset and facilities stakeholders are embracing the process as a way to cut costs, increase efficiency, and keep assets running like clockwork.

By performing regular preventive maintenance (or its cousin, data-based predictive maintenance) you are heading off problems, snafus and breakdowns at the pass. It’s about identifying and handling any potential issues that may be lurking down the road. The point is to find potential problems before they become real problems that could lead to delays and costly headaches.

The irony of preventive maintenance is that it can sometimes seem like it causes more problems than it solves. It requires regular downtime, which in itself is a problem. There’s also the tricky matter of timing. Finding the optimal time to perform the maintenance can be a delicate balance between shutting down for maintenance too soon and waiting too long.

But, the challenges are worth the rewards. Ensuring you have the proverbial well-oiled machine will make your operation more efficient and productive now and in the future.

Let’s take a look at preventive maintenance benefits and challenges and how it can help boost your operations.

Preventive maintenance benefits

The idea behind doing regular maintenance on the lifeblood of your manufacturing operations — your machinery — is to keep it humming along at optimal efficiency and prevent any problems that might occur. Benefits to making it a regular part of your business process include:

You control the downtime schedule. It’s true that performing maintenance requires downtime. You’ll experience a work stoppage because of it. However, the good news is, when that downtime happens is up to you. You can schedule it for slow periods and avoid your high-volume times. Build maintenance into your schedule as a regular part of your routine.

Fewer surprises. A snafu happens, something breaks, and you have to stop production to figure out what it is and fix it. That can happen at any time, and trust us, it will happen when you least want it to. Performing preventive, not reactive, maintenance will lessen those unwelcomed surprises that erode your productivity and profitability. A general rule is that planned work will cost two-thirds less than unplanned work in time and other resources.

Increased efficiency. At USC Consulting Group, we’re all about efficiency, and one of the surest ways to find “hidden efficiencies” that you didn’t even know were possible is to perform regular preventive maintenance on your machines.

Increased longevity of your machinery and assets. This is key. Just like your car needs regular oil changes and tune-ups to keep it running at its best, so do your assets.

Preventive maintenance challenges

There are some challenges with doing regular preventive maintenance. However, in our view, these don’t outweigh the benefits.

Finding the optimal time to do it is tricky. A regular schedule is the key to finding the best time to shut down for maintenance. And the downtime is typically where we see the most pushback from executives and managers who aren’t thrilled with this process.

It will cause shutdowns. There’s no way around it. To perform maintenance on your equipment, the line must stop.

If it ain’t broke, don’t fix it. This is an old adage for a reason. You may be shutting down for your scheduled maintenance when no problems actually exist. The shutdown does come at a productivity cost, so… is it worth it? Some manufacturers solve this issue by performing predictive maintenance instead. It’s a more complex process that is data driven, and analyzes how your assets are performing in real time. All’s well? No shutdown. But if you find problems, that’s when you act. It reduces downtime, and you’re not replacing any parts while they’re still good to go. The downside of this approach is complexity and connectivity. If you don’t have state-of-the-art machinery, you won’t get the data analytics that this process requires. That’s why the majority of manufacturers today are using the preventive approach.

At USC Consulting, we’ve been helping manufacturing businesses increase their efficiency, production, throughput and profits for more than half a century. Get in touch today if you’d like to learn more about how preventive maintenance benefits can boost your bottom line.

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They happen every year in California and throughout much of the Pacific Northwest: wildfires. According to the Interagency Fire Center, 8.2 million acres burned in 2018 in the U.S. overall. In the Golden State so far in 2019, land scorched nears 8,000 acres.

But wildfire season is slightly different this time around, in addition to displacing thousands of residents and businesses, the effects have also led to widespread power outages. Some of these have been scheduled by the state’s largest utility provider, Pacific Gas & Electric Corp., in order to ensure the safety of firefighters and emergency personnel battling the blazes.

However, patience has ceased to become a virtue for many of the state’s residents impacted, and the length of the outages is peeling back the curtain on what many people view as one of the country’s most pressing problems as it relates to infrastructure: the aging electrical grid. Because the vast majority of small-business owners and major corporations require power to provide, manufacture, or deliver products and services, the grid’s failings are forcing companies to evaluate their current processes and develop workarounds so service interruptions are minimized.

As veteran business owners can attest, it’s not if they’ll be affected by outages, but when and for how long.

Are blackouts happening more frequently?

If it seems like outages are occurring with greater regularity, it’s not your imagination. In 2017, the most recent year in which complete data is available, outages totaled 3,526 nationally, according to estimates from Eaton. These affected close to 37 million people — many of them business owners — and lasted close to an hour and a half per outage. They also occurred in all 50 states.

For the ninth consecutive year, California experienced the highest number of power failures. And between 2008 and 2017, the total was close to 4,300, more than doubling the amount in Texas, which saw the second highest number at 1,603, Eaton reported. Furthermore, how much time passed before the lights came back on in the Golden State was considerably longer than the national average at 133 minutes.

Of course, outages are hardly isolated to the nation’s most-populated state. Several other states experience a greater number of them and for lengthier time periods than in years’ gone by. These included Alaska (138 minutes), the state with the lowest population density, Arizona (138 minutes), Wyoming (153 minutes), Vermont (172 minutes), and Montana (212 minutes).

Why are they occurring on a more regular basis?

Because so many variables play into the power supply and its reliability (e.g. weather-related events, source of electricity, car accidents that damage utility poles, etc.), it’s difficult to isolate their frequency to one issue. In general, however, the uptick is largely due to a lack of investment in fixing the grid as it presently exists and the growth in the country’s population. In other words, more properties are tapping into an already tapped out energy infrastructure.

As chronicled by the American Society of Civil Engineers, the U.S. at present has approximately 640,000 miles worth of high-voltage transmission lines. Most of these distribution lines were installed in the 1950s and 1960s. At that time, they weren’t expected to last more than 50 years. With it now being 2019, do the math. What’s more, in the contiguous U.S., power grids are operating at full capacity.

In short, wear and tear, accompanied by utility lines being stretched thin, has taken a toll.

Additionally, investments in shoring up the grid have been insufficient. Some lines are owned by the federal government, which the ASCE notes lacks an adequate federal energy policy, while others are managed by investor-owned utilities. Specifically, they’re responsible for only 6% of electrical providers, yet serve close to 70% of customers.

Add in the surge in wildfire activity as well as other weather-related catastrophes — 17 of the last 25 Atlantic hurricane seasons have been above average in terms of activity, according to the National Oceanic Atmospheric Administration — something’s got to give. That something is the electricity.

These are among the reasons why major utility providers such as PG&E don’t expect blackouts to diminish anytime soon. At an October meeting held by the California Public Utilities Commission, PG&E CEO Bill Johnson noted it could be 10 years or more before they’re “really ratcheted down significantly,” NPR reported.

Although many households in California are still in the dark a month removed from the shutoff events, at least 2 million Californians were without power when the outages peaked in October.

What is the solution?

While there are many potential answers to the power problem, something everyone agrees on is there’s no quick fix. Some communities and municipalities, such as those in Wyoming, have decided to bury electrical lines so they’re underground, thus avoiding impact-related events that cause outages. This may help explain why Wyoming has averaged the fewest power outages between 2008 and 2017 (only 94). However, the problem with these is cost: three times more than traditional overhead, as noted by the Casper Star Tribune.

ASCE has a few suggestions, noting that any meaningful action must start at the top:

• Federal government must comprehensively assess where grid requires reinforcements and strategically invest in alternative energy sources such as biomass, hydroelectric, geothermal, and solar.
• Utilize remote sensing and inspection technologies to improve maintenance and real-time detection.
• Rebuild distribution lines so they’re more resistant to seasonal forces (wind, heavy snow, ice, etc.).
• Make it easier for utility providers to obtain permits they need to begin construction.
• Enact a national “storm hardening” plan that is guided by the recommendations of electrical engineers.

Restoring the nation’s power grid — as well as your own — will cost money, but doing nothing about it may cost more if outages continue to proliferate as expected. From 2003 to 2012, outages resulted in losses that averaged between $18 billion and $33 billion for the U.S. economy when adjusted for inflation, according to ASCE’s calculations. Even one lengthy outage can be devastating on productivity, never mind several.

At USC Consulting Group, we can power your processes so you can keep your business up and running so the lights don’t go out. We do this by analyzing how your company functions at present, set up asset maintenance best practices, and offer step-by-step solutions for where to fill gaps. The productivity improvements and supply chain optimization we recommend can help you work proactively so you’re always expecting the unexpected. Please contact us today.

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The U.S. chemicals manufacturing space is poised for growth following years of middling performance. Worldwide economic development, improvements in the domestic manufacturing and oil and gas industries, and the completion of improved chemical production infrastructure are likely to drive historic gains over the next two years, researchers from the American Chemistry Council found. Production volumes are expected to increase 3.7 percent in 2018 and 3.9 percent in 2019, laying the groundwork for an industrial valuation of more than $1 trillion by 2022. How has the sector managed to regain ground in the marketplace? Increased production capacity linked to digitization.

Advanced hardware and software are transforming chemicals producers of all sizes, facilitating efficiency gains across virtually all operational areas, from the back office to the shop floor, according to the World Economic Forum. By 2025, digital technology will have generated a cumulative economic value of between $310 billion and $550 billion within the worldwide chemicals space. There are, of course, countless solutions and deployment methods specially designed for use within the chemicals manufacturing arena. However, innovations centered on asset management stand above the rest in terms of demonstrable operational impact.

Unpacking the asset management equation

Chemical companies live and die by the mission-critical machinery they use to craft their product. In the event of unexpected downtime, the entire operation grinds to a halt, customers orders go unfilled, and revenue drops. Losses can increase at an accelerated rate when this occurs. For example, the average automotive manufacturer loses an estimated $22,000 per minute of unplanned production stoppage, according to research from Advanced Technology Services and Nielsen. Only the largest companies can weather such losses. Small or midsize organizations might falter entirely under the weight of such astronomical downtime costs.

Chemicals manufacturers are at great risk for suffering such events due to the very nature of their work. These firms supply the market with more than 100,000 different chemical compounds, according to the WEF. The vast majority of these substances are extremely caustic and therefore wreak havoc on production assets, requiring major investments in maintenance. In the U.S., chemicals producers are expected to spend more than $1.26 billion on planned maintenance activities in 2018, constituting a year-over-year rise of more than 38 percent, analysts for the ACC found. Of course, this figure does not take into account unplanned work, which usually costs 2 to 5 times more than scheduled activities, according to the Marshall Institute.

Implementing an innovative solution

Rising costs and the continual existence of massive maintenance-related risk has forced businesses in the chemicals manufacturing arena to embrace bleeding-edge technology in hopes of streamlining asset management workflows and ultimately improving reliability. Many are turning toward predictive maintenance processes powered by connected equipment sensors and robust backend platforms, Schneider Electric reported. These all-encompassing solutions allow chemical companies of all sizes to closely monitor their production assets and catch small mechanical issues before they devolve into full-on catastrophes with the potential to cause downtime. Such products also give producers the power to continually fine-tune their machinery, embrace continuous improvement, and boost productivity.

Early adopters have seen serious results, promoting wider investment in the technologies that underpin such proactive asset management approaches. For instance, businesses across all sectors are expected to spend more than $239 billion on industrial sensor technology alone in 2018, researchers for the International Data Corporation have predicted. Firms in the chemicals manufacturing space are likely to contribute to this spend as they retrofit their production workflows to more effectively compete in an expanding marketplace. However, such technology is unlikely to remain optional for long. Almost 90 percent of chemical company executives believe businesses in the industry that fail to embrace digitization will end up falling behind, the WEF found.

Chemicals manufacturing firms standing on the outside looking in on this trend must act quickly to implement next-generation asset management processes and technology. USC Consulting Group can help. Here at USCCG, we’ve been working with businesses across numerous industries for 50 years, helping them adjust to marketplace transformations of all kinds. Connect with us today to learn more about our work and how our chemicals manufacturing consultants can help your enterprise embrace and benefit from digitization.

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Energy companies across the globe have been forced to change their operational approaches in response to an evolving energy marketplace. Crude oversaturation, along with the emergence of cost-effective alternative sources such as natural gas, has pushed per-gallon prices for gasoline and oil down considerably, according to research from the Energy Information Administration. Consequently, firms have found themselves engineering massive restructuring initiatives over the past two years, transforming their business verticals and on-the-ground workflows via mergers and acquisitions, all in an effort to remain prosperous in the low-price era, CNBC reported.

With this work completed, analysts expect more transactions to occur within the global energy space. However, this M&A activity will constitute the heart of portfolio consolidation programs aimed at catalyzing growth and bolstering production. How might this unfold?

Understanding the M&A environment
Many large oil and gas producers with balanced budgets are looking to increase efficiency at scale through tactical moves that allow them to net more acreage in high-yielding territory. At the same time, smaller organizations with considerable experience and drilling inventory seek to scale up through acquisition. This environment gives oil and gas giants such as Exxon Mobil the opportunity to acquire valuable assets located in prime drilling territory that requires little to no investment. RSP Permian, an independent driller based in Dallas, Texas, is an exemplary target for bigger producers hoping to consolidate through targeted M&A activity, according to Forbes contributor and energy journalist Claire Poole. The firm controls more than 500,000 acres of territory in the oil-rich Permian Basin, making the small yet well-established company an ideal acquisition for large organizations focused on solidifying their core operations.

Of course, RSP Permian is not the only viable asset on the market. A handful of other hardy entities are available for purchase. As a result, a significant number of transactions are likely to occur over the next seven months. By year end, the upstream transaction total may eclipse the $64 billion recorded in 2017, according to analysts at the oil and gas research firm 1Derrick.

Grasping the production impact
How will increased M&A activity affect production? Last year’s figures suggest improvement. Even as oil and gas companies swapped assets in 2017, crude production moved upward, especially in the U.S. market where companies exported record amounts of crude oil and petroleum products, the EIA reported. In short, a repeat performance is to be expected during this year of consolidation through M&A.

Oil and gas enterprises navigating this transaction-heavy territory should consider connecting with the industry experts at USC Consulting Group. With 50 years of experience, our consultants can help energy producers on both sides of the M&A equation achieve ideal outcomes. Not only will USC help streamline the M&A process, but they can help improve overall production and process efficiency focusing on areas such as asset performance management, predictive and preventative maintenance, throughput, reliability and sustainability, and inventory control. Contact us today to learn more.

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The American manufacturing space has experienced considerable improvement in recent years. Producers have embraced data-driven processes and procedures designed to boost productivity and keep overhead costs down. The industry contributed approximately $2.2 trillion to the U.S. gross domestic product in 2016, capping off four consecutive years of annual value-added figures above the $2 trillion mark, according to the Bureau of Economic Analysis. But this success is not a symptom of scale. More than 98 percent of U.S. manufacturing firms have fewer than 500 workers, according to the National Association of Manufacturers. More astonishingly, 3 out of 4 firms employ fewer than 20 workers.

How do American manufacturers account for more than 10 percent of the national GDP with such small staff rosters at their disposal? Operational optimization through continuous improvement. Almost 70 percent of domestic producers utilize lean manufacturing strategies to facilitate such an approach, Reliable Plant reported. These methodologies center on the collection and evaluation of key performance indicators, critical quality metrics that lend operational leaders insight into mission-critical workflows, giving them the power to spot deficiencies and make changes as quickly as possible. Only with this data can firms successfully navigate the modern marketplace where responsiveness reigns supreme.

There are numerous shop floor functions suitable for performance measurement programs. However, industry innovators and researchers have pinpointed several operational avenues that can provide data capable of driving continuous change and bolstering the bottom line. Here are some of the KPIs associated with these shop floor hotspots:

1. Total downtime

Downtime is a manufacturer’s greatest enemy. When mission-critical assets stop functioning because of mechanical issues, producers often lose hundreds of thousands of dollars. For example, automakers lose an average of $22,000 per minute of downtime, according to research from Advanced Technology Services. A large number of modern manufacturers can’t survive such losses as most are already operating on razor-thin profit margins. This state of affairs makes the total downtime KPI an essential metric of quality. Gathering this data is relatively easy, but tracking it and exploring the operational variables behind it can have an immense impact.

Most producers pair this macro measurement with finer KPIs, such as overall equipment effectiveness (OEE) or changeover time, to form a more robust downtime picture.

2. Takt time

This versatile KPI – the amount of time it takes to complete a given task – works in numerous operational contexts. According to Food Manufacturing, plant supervisors can leverage takt time to track the entire product creation process and monitor the smaller functions that make up this total workflow. This allows for increased visibility and gives producers the power to institute minor tweaks in piecemeal to get the most out of their shop floors. Takt time is also one of the few KPIs that relates directly to the customer. These readings can show businesses where they stand in relation to customer demands centered on timeliness, even reveal upgrades that could quicken production processes and more effectively meet the needs of modern buyers.

On the surface this KPI may seem basic, but its versatility and connection to the customer experience make it an essential metric for even the most advanced manufacturers. Again, there are other KPIs that work well with takt time, including estimated time to completion and piece variance. These measurements relate directly to customer satisfaction and can therefore yield useable insights with transformative power.

3. First pass yield

The days of the single-use production line are over. To compete in today’s marketplace, manufacturers must be prepared to reconfigure their operations to meet changing volume demands or roll out new products altogether. This state of affairs makes first pass yield an essential KPI for modern producers. This metric measures the effectiveness of a given workflow during its initial run. Quality assurance personnel calculate the first pass yield by dividing the number of completed units requiring no rework by the number of total products produced. Using this figure, shop floor stakeholders can assess the overall efficacy of a new process and make changes to improve its productivity.

In the past, this KPI may have been something manufacturing leaders used only occasionally. But times have changed. With customer demands shifting so frequently, manufacturers must be ready to reorganize their processes and measure their effectiveness after reorganization. The first pass yield KPI makes this possible.

4. Mean time between failures

Manufacturers are only as reliable as the production equipment they have on the shop floor. This is why many organizations adopt preventive maintenance strategies with cutting-edge technology at their centers. More than 40 percent of manufacturers currently subscribe to this approach, while another 30 percent have gone one step further and embraced predictive maintenance, according to recent research from Plant Services. A majority of these maintenance-minded firms rely on the KPI mean time between failures (MTBF), which is the length of time a repairable asset will function properly after experiencing a major mechanical problem and before doing so again. This KPI gives maintenance teams a base line off of which they can schedule preventive activities.

Mean time between failures and related metrics, such as mean time to failure (MTTF) and mean time to repair (MTTR), help manufacturers evaluate overall asset reliability. With this information in hand, operational stakeholders can make incremental improvements to plant efficiency and productivity.

Manufacturing businesses looking to carve out space in today’s marketplace must focus on continually improving their workflows, as processes, not manpower, lay the groundwork for success. These KPIs give such enterprises the power to dive deeply into their operations and pinpoint deficiencies big and small that could be holding them back. Here at USC Consulting Group, we have been working with manufacturers for decades, connecting them with experts who can craft customized operational improvement plans designed to stimulate growth. Contact us today to learn more about our work in the space and how our in-house consultants can help your firm reach new heights.

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The Trump administration recently published its 2019 budget proposal, which includes deep spending cuts totaling hundreds of billions of dollars. The budget request also calls for the elimination of several federal oversight bodies, including the U.S. Chemical Safety Board, according to Bloomberg. Created in 1990 as part of the Clean Air Act, the independent watchdog leverages $11 million in annual funding to investigate industrial incidents stemming from the mismanagement of caustic chemicals. While the elimination of the CSB seems, on the surface, an ideal development for industrial organizations, some industry leaders and workplace safety experts have expressed skepticism.

Modern manufacturers are deeply invested in protecting their employees, and support the work of bodies such as the CSB as they establish new workplace safety paradigms centered on innovative strategies and technology. Current CSB Chairperson Vanessa Allen Sutherland has received praise from industry leaders for streamlining the agency’s investigation workflows and collaborating more effectively with businesses. Despite these positive developments, however, the agency has been put on the chopping block as part of a wider push for government deregulation.

How would the abolition of the CSB impact firms developing new safety and reliability programs?

Addressing chemicals in the workplace
Chemical compounds are among the most serious safety hazards found within industrial work environments, according to the National Safety Council. Manufacturers and other businesses leverage hundreds of different substances in everyday workflows and produce significant amounts of equally dangerous chemical residue. Workers who encounter these materials can suffer serious or sometimes fatal injuries. In fact, approximately 268 American employees died in 2016 because of such exposure events, according to research from the Occupational Safety and Health Administration. Firms in the industrial space are well aware of the dangers that their workers face, which drives them to develop safety and reliability programs that prevent injuries.

Oversight bodies like OSHA and the CSB are heavily involved in these efforts, working with industry stakeholders to create enforceable policies that keep employees safe, even as they encounter risk while performing everyday duties. In 2016, the CSB conducted seven major investigations, including an inquiry into the 2013 explosion at the West Fertilizer Company plant in West, Texas, that killed 15 workers and injured more than 260 others. Through these investigations, the CSB developed best practice recommendations so industrial businesses do not repeat the errors of their less fortunate peers. OSHA adds another dimension by approaching the subject of chemical management from the position of the worker and formulating safety standards that keep employees safe. While businesses in the industrial space have traditionally butted heads with OSHA, they have had a productive relationship with the CSB, which many leaders credit for revolutionizing chemical handling practices here and abroad. Its investigations have resulted in the creation of new guidelines that not only keep workers safe but also reduce costs associated with employee injury.

Considering operations after CSB
If Congress embraces the Trump administration’s budget and authorizes the elimination of the CSB, then industrial organizations would have to seek out new external partners and refocus their efforts in order to ensure vigilance in an environment with little federal oversight. The critical insight the agency once provided would be gone, increasing the likelihood of catastrophic events caused by small operational lapses. The West fertilizer plant resulted in more than $230 million in damages to the local community. Without the CSB, another similar situation may develop.

USC Consulting Group can help chemical manufacturers with operating efficiency by developing effective safety and reliability programs for addressing chemical usage in the workplace. Furthermore, our consultants can establish asset performance management programs to ensure facilities are properly maintained with scheduled maintenance and well-planned outages, resulting in their employees staying safe from avoidable mishaps.

Is your organization considering how it might operate in a world without the U.S. Chemical Safety Board? Connect with USC Consulting Group today to learn more on how to improve safety in the workplace.

Truly innovative asset management covers all aspects of monitoring, analyzing, and maintaining capital equipment. Does your business have all its bases covered?

Now recovering from economic instability over the last decade, companies in asset-intensive industries have begun to invest in new and recommissioned equipment. In turn, these decisions ignite a fervent interest in improving uptime quality through optimized workflows, reliability-centered maintenance, and proactive decision-making.

Download our latest e-book “Asset Management: The Rise of Reliability” to discover asset management best practices from our team of experienced operational experts. Here are the seven points examined and discussed therein.

1. Work management
A work order is more than just a slip of paper. Its life cycle extends further than most businesses realize and should include information valuable to future successes in asset management.

2. Downtime tracking
If you fail to understand the nuance of downtime tracking, you will fail to sustainably decrease it.

3. Preventive and predictive maintenance
Reward awaits those facilities that understand what these two cutting-edge maintenance methodologies entail and how to execute on them properly to achieve new heights.

4. Asset criticality review
Are you allocating your resources to the machinery that matters most to your business? Align your goals with your actual asset management processes with a comprehensive ACR.

5. Equipment history capture and analysis
Those who ignore history are doomed to repeat it. Do you know what sorts of data you should capture about your assets today in order to make informed decisions tomorrow?

6. Root cause failure analysis
Assets fail for any number of reasons, but they boil down to three basic types of failure. Learn these as well as tips for digging below the surface when failures strike.

7. Operator equipment care
Line operators can work wonders for an innovative asset management program – if only their leaders know how best to utilize them.

Asset-intensive industries have cautiously maintained their commitment to present and future major capital investments in the wake of the 2008 economic collapse. Total capital expenditure, which includes the purchasing of both equipment and structures, has grown without pause since 2009, according to a recent report from the U.S. Census Bureau.

But ventures today are not the same as they were before 2008. They now come with new perspectives on how best to improve reliability across the business with tightening margins, ensure throughput or productivity by reducing downtime and preserve mission-critical assets effectively, intelligently, and affordably throughout their life cycles. To some degree, all industries with large-scale assets cared about these principles in the past, but now many – energy, oil and gas, process industries, telecom – must do so in the face of trends rapidly transforming their sectors.

Considering major capital investments? Here’s how enterprise asset management and maintenance can save you from dire financial straits.

Are you caught in an asset utilization trap?

Industries with heavy assets owe it to themselves to develop innovative and more robust asset management practices, lest they fall victim to an endless cycle of profligate capital spending.

Let’s use an example industrial businesses have no doubt experienced: how to respond to low asset utilization. A mining company crunches the data on month-over-month utilization for its fleet of articulating vehicles. Asset management metrics return a utilization rate of around 45 percent, same as it’s been for more than a year. Utilization has plateaued, so company stakeholders decide that increased capital investment on newer trucks will resolve their issue with stagnant asset-related revenue generation.

Chances are good that it won’t, definitely not if low utilization stems from maintenance and scheduling. An ill-prepared asset management program in charge of a larger fleet will only exacerbate the utilization problem, not fix it.

If this mining company, or any other asset-reliant business for that matter, truly believes in the doctrine of continuous improvement, they will turn their attention to the real culprit: underdeveloped asset management operating systems and reliability-centered maintenance. Here’s how to build out these areas and create an asset support network that drives higher utilization:

Get granular with preventive or predictive maintenance

All industries that rely on heavy equipment or high-tech plants must gradually, but assuredly, move toward a proactive versus reactive stance on enterprise asset management. Repairs and calibration must either happen on a time-based cycle (preventive maintenance or PM) or through advanced sensors and preemptive failure detection (predictive maintenance or PdM).

However, these are very broad recommendations asset management teams will probably already understand the value of. What specific details should PM and PdM adopters lock onto if they want to boost utilization?

Pinpoint ideal KPI metrics: Find the measurements that align best with your mission as an organization and can report capably on issues surrounding asset utilization, then automate the acquisition and visualization of those measurements so you understand them in real time.

Investigate data hygiene: Key performance indicators must be accurate to serve operators, technicians, and supervisors. Review where your data comes from, who handles it, and what may adversely affect its veracity.

Standardize cross-functional transparency: Businesses that democratize information allow their workers to contribute to and analyze all data related to asset health. Build visibility into the entire asset management operating system – reporting, inspecting, scheduling, repairing, confirming, and documenting – and leave no area of your business in the dark.

Devote more resources to root cause failure analysis

Are mechanical failures on critical assets really the result of something mechanical? You’ll never know without comprehensive root cause failure analysis (RCFA).

Although deficiencies or outright failures may present as technical glitches, best-in-class asset management processes must dig below the surface to reveal what’s actually causing asset functionality – and ultimately utilization across the board – to drop.

Returning to the hypothetical mining company from before – perhaps utilization rates were low because heavy trucks require a lot of maintenance. What kind of maintenance? Technicians report back that the most common work order is repair or replacement of shock absorbers. To the untrained eye, this appears rational given the rough terrain and capacity requirements of the job. But practitioners of thorough root cause failure analysis don’t stop there. They ask the following:

• Are these universal issues experienced by competitors?
• Are these failures caused by the roads we drive on?
• According to the manufacturer’s specifications, are we overloading these trucks?
• Is a lack of communication between operators and maintenance professionals to blame?

Immediate remediation of one, some, or all of these concerns will improve the reliability and availability of assets, raise utilization rates, and may even deter unnecessary capex and opex spending. In order to achieve this high level of awareness over the condition of capital investments, however, asset-intensive businesses must first invest their time and effort into fleshing out RCFA.

Want to learn more about how to improve asset utilization through asset management and proactive maintenance? Contact  USC Consulting Group  to speak to an operations management consultant today.

Regularly scheduled repairs on capital-intensive assets are the cornerstone of any preventive, predictive, or proactive maintenance strategy in the industrial sector. By preempting outright equipment failures and counteracting small, nearly unnoticeable deficiencies in performance, businesses save cycle time, maintain product/service quality, optimize labor costs, prevent waste, keep operators safe, and preserve the lifespan of their most valuable machinery.

All these benefits aside, planned asset maintenance programs require plant managers and decision-makers to coordinate with technicians as to customizing a maintenance agenda that comports with the business at hand, whose operations may differ vastly from others. However, a few considerations are universal and enhance maintenance scheduling no matter where or how one works.

Consider capacity always
In the industrial sector, nothing should be more valuable to a business than production or service. To that end, companies dependent on advanced machinery rely on scheduled asset maintenance programs, first and foremost, to sustain uptime. Planned maintenance or tune-ups minimize the impact offline equipment has on the business’s bottom line.

Depending on the number of assets under a given planned maintenance program, it is possible to lose this edge because of –believe it or not – poor planning in regard to capacity. Let’s say you own a fleet of 100 delivery trucks and, on an average day, you need 90 up and running to accommodate your customers. Any maintenance schedule, therefore, could only address one-tenth of the fleet on any given day, otherwise, the work would compromise availability.

Capacity, unfortunately, is never that cut and dry. Maintenance management teams should always consider backlog, upcoming product/service changes, or seasonal demand metrics which may affect operations and respond intelligently.

Planned maintenance can deliver incredible value, so long as you’re doing it the right way.

Factor in labor costs
Reactive maintenance, or responding to failures after they occur, can cost a business significantly through emergency labor. A study by Maintenance Phoenix found businesses can spend nearly 20% of the total replacement cost for a given machine to remedy a single reactive maintenance event. Comparatively, proactive maintenance events generally cost just 1.4% of the same variable.

Expenses that low don’t happen automatically, so maintenance management teams should keep a few things in mind. First, it is almost always better to spread larger maintenance orders over a few shifts rather than tackling everything all at once. This leaves room in technicians schedule for other things that may crop up.

“Don’t let overtime negate the margin of savings reclaimed by switching to a planned program.”

Second, overtime expenses should be a major factor in planning, regardless of whether businesses employ in-house repair professionals or outsource. Typically, initiating a preventive, predictive, and proactive asset maintenance program involves hiring a few additional technicians. Scheduled maintenance during overtime hours may, therefore, negate the margin of savings reclaimed by switching to a planned program in the first place.

Prioritize work orders
Another benefit to scheduled maintenance is the ability to rank work orders in a low-risk environment. Reactive maintenance forces organizations to respond to situations as they arise, leaving little to no time to respond to anything else. Since planned maintenance catches failures before they happen – usually through embedded sensors and telemetry monitoring internal changes in temperature or vibration – the organizations that adopt such programs may be allowed windows of opportunity to handle repairs before experiencing the repercussions of leaving them unattended.

With that in mind, an asset-heavy company should not only create an actionable list of all their equipment and components, but rank those assets according to importance based on their respective business objectives. These lists should update after every major tech investment to ensure prioritization accurately reflects current operations. Advanced computerized maintenance management software (CMMS) could be a welcome addition to maintenance management system and help businesses develop both a master asset list and real-time asset hierarchies.

Making the change to scheduled asset maintenance delivers many competitive advantages, so use these tips to develop a more robust and effective program.

Comprehensive preventive maintenance and asset management ensure both the functionality, and efficiency of high-value equipment at a given business throughout its lifecycle. Yet, without an equally comprehensive auditing and optimization strategy for the ancillary processes around enterprise assets, businesses may accidentally overextend their operating budgets in unnecessary, preventable ways.

How can manufacturers, process industries, energy providers and other asset-intensive sectors optimize their preventive maintenance programs without hurting their productivity?

Reduce preventive maintenance schedule variance
When it comes to preventive maintenance, no matter how beneficial it may be to enhancing the performance of enterprise assets, it is possible to have too much of a good thing.

Is your maintenance schedule overbooked, underbooked, or just right?

Uneven scheduled downtime, for instance, could hike up operational costs in one of three ways:

1. When preventive maintenance occurs too frequently, maintenance labor costs outweigh the threat posed by machine deficiency or outright failure. Balancing these costs is crucial to getting everything a business needs from its PM, but not overpaying for superfluous maintenance.
2. Spacing scheduled preventive maintenance too far apart has its obvious consequences, like unintentionally allowing a small deficiency to exacerbate unnoticed.
3. Choppy preventive maintenance schedules that vary hinder managers from planning strategically over the long term, both in an operational sense and financially.

Moreover, as The Maintenance Phoenix pointed out, scheduling variance could be the result of uncalibrated enterprise asset management software like computerized maintenance management systems (CMMS). Variance could also occur when maintenance professionals assigned repairs don’t carry out work orders within a tight timeframe. To cut down on preventive maintenance variance, businesses should assess their operational data, determine whether their maintenance programs suffer from any of these issues and take the needed corrective steps.

Minimize spare parts inventory management and costs
Traditionally, spare parts management follows along the same vein as asset management. In fact, there is considerable overlap between the two. Both preserve asset availability and mitigate the impact of downtime when it strikes.

That said, businesses must constantly work toward honing their spare parts inventory as much as possible without compromising the insurance these components provide asset uptime. Accomplishing this involves a two-pronged approach to spares: analysis and adjustment.

When a particular component within an asset breaks, an inventory of spare parts on hand accelerates the repair process. However, spare part inventory growth inexorably leads to cost increases, sometimes to the tune of as much as 20 percent or more of company expenditures, according to Life Cycle Engineering. Instead of adding a new batch of spares to the pile whenever assets appear to require them, it might be more cost-beneficial to perform root cause analysis on the “bad actor.”

For example, if a manufacturer spends $2,000 per month stocking fan belts for an asset integral to production, perhaps spending a little more on a one-time RCA cost may uncover why the asset churns through fan belts in the first place. A successful RCA, followed by corrective maintenance, could effectively eliminate the recurring cost entirely.

After tackling spare parts inventory, businesses should then be sure to adjust procurement plans accordingly so they represent the new optimized operations precisely and cut costs.